Last year was marked by historic upheaval in regulatory and recruiting realms ― but not where compensation was concerned.
"It wasn’t a year to make a lot of big changes," says compensation consultant Andy Tasnady, who points to "the unsettled nature of the marketplace due to the DOL rule."
Each year, On Wall Street
compiles an analysis looking at the starting payouts at wirehouse, regional and national brokerage firms for advisors at four different production levels. Core payout grids remained largely untouched across the country even though firms have changed investment platforms in response to the Department of Labor's fiduciary rule
by slashing some funds and changing fee structure, Tasnady notes.
"They’ve been making tiny tweaks to bonuses, but the core comp hasn’t changed for most people," says Tasnady, who helped prepare this year's compensation analysis.
To be sure, regional brokerage firms are not known for annually tweaking compensation plans, a practice long common at wirehouses. Raymond James, for example, cut core pay by 100 basis points
, the first compensation change the firm has made since 2013. But even firms that were known for annual comp changes are generally becoming more reticent to "monkey [around with] with their grids," says recruiter Mark Elzweig.
"Traditionally, every year they started changing the grid around and people felt a loss of sense of control. Advisors would get mad and leave. So now the major wirehouses leave their grids intact. Firms have realized that giving producers a slightly different grid every year is a losing strategy, because you're always going to lose people when you do that," Elzweig said at On Wall Street's annual recruiters roundtable
Scroll through to see how compensation plans compare in 2018.
To see last year's compensation analysis, please click here
Data was collected by SourceMedia and analysis conducted by Tasnady & Associates.
A number of special policies are not included here since they do not affect 100% of the population evenly and therefore are more haphazard to compare. Individual results can vary dramatically, based on the mix of business and policies at each firm. For example, pay can rise from special bonuses and fall from penalties such as discount sharing, small client limits and ticket charges
Assumptions for basic pay (prior to special policies/contingent bonuses):
- 25% in individual stocks; 25% in individual bonds, 25% in mutual funds; 25% in fee-based (wrap accounts, managed accounts, etc.)
- Year-end basic bonuses are shown in deferred totals.
- Length of service is assumed to be 10 years.
- Assumes no bonuses from growth, nor asset-based bonuses, or other behavior-based awards.
Also excludes voluntary deferral matches, 401(k) matches or profit sharing contributions unless otherwise noted.
Does not include: T&E expense allowance, discount sharing or ticket charge expense assumptions, small household or small ticket policy assumptions, or value of any options awards.